Thousands of Obamacare Customers at Risk of Losing Coverage or Subsidies

More than 7,000 customers of Connecticut’s health insurance exchange must provide additional documentation to maintain their coverage or the tax credits that subsidize their premiums – a process that has already led to confusion and, in some cases, lost coverage or subsidies, exchange CEO Jim Wadleigh said on Aug. 18.

By law, health insurance exchanges created under Obamacare must verify certain information about their customers, including citizenship or immigration status and income. In Connecticut, a contractor, Xerox, handles the process, but if the company is unable to verify information, customers must provide additional documentation within 90 days. If that doesn’t happen, their coverage or subsidies could be terminated.

“We are seeing both of these, and it is causing a lot of frustration, confusion in the environment, with a number of people,” Wadleigh said.

Among the issues:

Some customers have lost coverage and have only learned about it after going to the doctor or trying to fill a prescription. Wadleigh said the exchange has been hearing about 50 to 75 cases like this per week, and said the customers were terminated because they did not send in the required information.

Customers have complained that they have sent in the requested documents but still receive notices that they need to submit information.

A backlog in processing documents submitted for verification actually led some customers to remain enrolled or receive subsidies longer than they qualified for, according to the state Department of Social Services, which jointly administers the eligibility system with Access Health. DSS said verifications are now caught up for documents submitted since March, but Wadleigh said there are still about 16,000 cases pending at Xerox.

There are currently more than 7,000 customers who have not submitted any of the documents needed for them to maintain coverage, Wadleigh said.

A recent survey of customers found that many do not read the mail they get from Access Health, he said.

“Why aren’t they opening letters from Access Health? We can’t figure that out,” Wadleigh said. “Which is our problem. We need to figure out how to do that.”

Income, Citizenship Verification Backlog

Verification of income and immigration status or citizenship by exchanges has been a controversial issue nationally. For most of 2014, state and federally run exchanges did not cut off customers’ coverage, even if they didn’t provide proof of citizenship or immigration status, income or other information. That prompted criticism from some who warned that it left exchanges vulnerable to fraud and wasting taxpayer dollars subsidizing coverage for people who didn’t qualify.

Access Health initially planned to begin terminating coverage of those whose information could not be verified – and who hadn’t provided documentation – last December, but delayed it because of concerns about causing confusion during the ongoing sign-up period for 2015 coverage.

Access Health began cutting off coverage for those who had not submitted documentation in February.

As of July, 96,966 people had private insurance coverage purchased through Access Health, down from 110,095 in March, although it’s not clear how much of that drop was the result of people’s losing coverage because of verification issues.

If a customer submits a document, Access Health’s system receives a notice that effectively puts the case in a safe harbor that prevents the person from having coverage or subsidies cut off until the document is processed, Wadleigh said.

Wadleigh said he believed some documents that have not yet been processed were submitted as far back as November. The exchange has been trying to put pressure on Xerox to finish the work faster, Wadleigh said.

But DSS spokesperson David Dearborn said the agency believed Xerox was handling its responsibilities well.

“Xerox has one piece of the process involving the system,” Xerox spokesperson Carl Langsenkamp said. “We have performed admirably to help close the backlog.”

Dearborn said the backlog was the result in part of other issues related to the system, including situations in which customers submitted documents but still received subsequent requests for verification. Wadleigh said that has occurred when people who applied for coverage returned to make a change in their account, such as changing their address or adding a family member. Doing so can generate a new application, and if the person needed to send in documents to verify information, the system would require documents for each separate application, Wadleigh said.

That creates more work for Xerox, Dearborn said, contributing to the past delays in verifying information.

In June, Dearborn said, Access Health and DSS agreed to grandfather in people who submitted documents before March that had not yet been verified, allowing them to remain enrolled unless they were unenrolled for unrelated reasons.

“Ongoing eligibility for these individuals will be reviewed shortly during the upcoming annual renewal,” Dearborn said.

Changes to Address Concerns

To address problems related to the verification process, Access Health is hiring 10 additional staff to handle calls about lost coverage and discontinued subsidies, and is requiring customer service staff to work overtime and weekends to address customer issues as quickly as possible. The exchange has been working to reinstate coverage for those who called after finding it was cut off, Wadleigh said.

Starting next month, customers will receive robo calls from the exchange if they are within three to four weeks of having their coverage terminated because documents have not been submitted.

In addition, Wadleigh said, there will be changes made to the system in October to try to limit multiple applications from being generated when customers make changes.

The contract with Xerox is held by DSS, and Wadleigh said Access Health would like to have a separate contract for verification work so the exchange would have more leverage when it comes to processing the forms of customers with private insurance. Xerox also handles verification of documents for people who are deemed eligible for Medicaid.

But Dearborn raised concerns that replacing Xerox could lead to fragmentation in the system, and said that the issues are related to the verification process itself.

To better address them, Dearborn said, DSS officials believe the answer is to create more automated ways to verify information. Currently, Xerox has to manually verify immigration status or citizenship information if an initial attempt to verify it through the federal government does not succeed, but Dearborn said the system could be linked with a federal system that would allow for more automation.

“For reasons involving prioritization decisions in the joint system, it hasn’t happened yet,” Dearborn said. “DSS believes that this is the best ultimate approach to verification issues, rather than re-contracting for the functions Xerox is generally performing well in dealing with the upstream issues.”

She is a proud product of the Danbury public school system, and a parent of a special needs child in one of our schools, and understands the challenges of preparing our students to compete in a global economy.